InfoBytes, March 18,2011 - Weekly In-depth review of news & developments in the financial services industry

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Topics In This Issue

• Federal Issues

• State Issues

• Courts

• Firm News

• Miscellany

• Mortgages

• Litigation

• Credit Cards

• Criminal Enforcement Action

Excerpt from "Federal Issues"

Debt Collection Company Agrees to Pay Record $2.8 Million Civil Penalty to Settle FTC Charges. On March 16, the Federal Trade Commission (FTC) announced that West Asset Management Inc., a leading debt collection company, has agreed to pay a civil penalty of $2.8 million to settle charges that its collection techniques violated federal law. The settlement is the largest ever obtained by the FTC in a debt collection case. The FTC complaint, which was filed by the Department of Justice on behalf of the FTC, in U.S. District Court for the Northern District of Georgia, alleged that the collection company violated both the FTC Act and the Fair Debt Collection Practices Act by, among other things: (i) calling consumers multiple times each day, often regarding accounts that did not belong to them, and sometimes using abusive language, (ii) disclosing the existence of consumers’ debts to third parties, (iii) withdrawing funds from consumers’ bank accounts and charging their credit cards without consent, (iv) falsely claiming that consumers would be sued, arrested, or have their property seized, (v) falsely claiming that partial payments would be accepted as full settlements on accounts, and (vi) falsely claiming that negative information would remain on consumers’ credits reports until debts were paid. The settlement order, in which the collection company did not admit any wrongdoing, permanently prohibits the company from using certain debt collection practices alleged to be false, deceptive or unfair.

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Published In: Administrative Agency Updates, Criminal Law Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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